Gulf & Ship Island R. Co. v. Hewes, 183 U.S. 66 (1901)

Please note: this case begins in mid-page. It therefore shares a citation with the last page of the previous case. If you are attempting to follow a link to the last page of 183 U.S. 62, click here.

Gulf and Ship Island Railroad Company v. Hewes

No. 5

Argued October 15-16, 1901
Decided November 18, 1901
183 U.S. 66

ERROR TO THE SUPREME COURT

OF THE STATE OF MISSISSIPPI

Syllabus

Although the certificate of the chief justice of a state supreme court that a federal question was raised is insufficient to give this Court jurisdiction, where such question does not appear in the record, it may be resorted to, in the absence of an opinion, to show that a federal question, which is otherwise raised in the record, was actually passed upon by the court.

A charter of a railroad company incorporated by an act of the legislature of Mississippi passed in 1882 contained an exemption from all taxation for twenty years. The state constitution adopted in 1889 provided that the property of all corporations for pecuniary profit should be subject to taxation the same as that of individuals, and that taxation should be equal and uniform throughout the state. Prior to the incorporation of the railroad company, the supreme court of the state had construed this provision of the constitution as authorizing exemptions from taxation, but had declared that such exemptions were repealable. Held that this Court was bound by this construction of the constitution, and therefore that the railroad company could not claim an irrepealable exemption in its charter. Held also that, the exemption being repealable, the question whether it had in fact been repealed was a local, and not a federal, question.

A ruling of a state supreme court that a repealable exemption has been in fact repealed by a subsequent statute is one which turns upon the construction of a state law, and is not reviewable here, although if the exemption were irrepealable and thus constituted a contract, it would be the duty of this Court to decide for itself whether the subsequent act did repeal it or impair its obligation.

A privilege tax upon a railroad corporation is a tax upon property.

This was a bill in equity filed in the Court of Chancery of Harrison County, Mississippi, by the railroad company, against the tax collector of that county, to enjoin the collection of certain property and privilege taxes assessed against the railroad company for the fiscal year 1896.

The bill averred in substance the incorporation of the railroad company by an Act of the Legislature of the State of Mississippi approved February 23, 1882, the eighteenth section of which act declared

that said company, its stock, its railroads and appurtenances, and all its property in this state, necessary or incident to the full exercise of all powers herein granted, shall be exempt from taxation for a term of twenty years from the passage of this act;

that immediately thereafter, the corporation entered upon the construction of its road, and at the time of the filing of the bill had about seventy-five miles in operation; that, notwithstanding this charter exemption, the state railroad commission has returned its property for taxation, and that defendant has demanded not only a privilege tax, but a property tax levied for state and county purposes, and threatens seizure of its property. Wherefore an injunction was prayed.

To this bill defendant interposed a demurrer for want of equity and because the exemption was a mere bounty, repealable at the pleasure of the legislature, and void of any element of contract. The demurrer was sustained, and leave granted the plaintiff to amend its bill. Thereupon it filed an amendment alleging that the exemption in the charter constituted a contract between the plaintiff and the state, that the railroad was constructed upon the faith of such contract, and that it was not within the power of the state to repeal the exemption, and invoking in that connection the contract clause of the Constitution. Defendant again demurred. The demurrer was sustained, and an appeal granted to the supreme court of the state, which affirmed the decree of the court below. Whereupon plaintiff sued out a writ of error from this Court, which defendant moved to dismiss.